U.S Govt Lays Out Plans For Chips Funding By Feb 2023

The U.S. Commerce Department said on Tuesday that it will be able to accept by February applications for $39 billion worth government semiconductor chips subsidies to construct new facilities and build upon the existing U.S. production.

In August this year, the U.S had approved $52.7 billion for semiconductor manufacturing and research and a 25 percent investment tax credit for chip plants, thought to be worth $24 billion. That credit applies to projects, which begin construction after January 1.

The U.S President Joe Biden signed the legislation in order to improve efforts to make the country more competitive with China and to subsidize American chip manufacturing to solve an ongoing chips shortage, which has affected almost all the industries across the spectrum.

The U.S Commerce Department said in a statement, “Funding documents, which will provide specific application guidance… will be released by early February 2023. Awards and loans will be made on a rolling basis as soon as applications can be responsibly processed, evaluated and negotiated.”

The department announced that it plans “to use $28 billion to “establish domestic production of leading edge logic and memory chips that require the most sophisticated manufacturing processes available today” and $10 billion for new manufacturing capacity for “mature and current-generation chips, new and specialty technologies, and for semiconductor industry suppliers,” which includes automotive, defense and medical device chips.

The chips bill also includes $11 billion for research spending. The Commerce Department can also make use of up to $6 billion to support loans or loan guarantees rather than grants and “could be leveraged to support a $75 billion credit program.”

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